Intuitive Surgical (NASDAQ: $ISRG), leading medical devices maker, reported Q4 fiscal 2024 earnings on Thursday, January 23, 2025, after markets closed. Despite the earnings beat, the company’s stock slumped in premarket trading. Here is a deep dive into the stock.
Intuitive Surgical Q4 Results
In the fourth quarter of fiscal 2024, Intuitive Surgical reported a 25% YoY increase in revenue to $2.41 billion, beating forecasts of $2.25 billion. It reported a non-GAAP Net Income of $804.7 million for a non-GAAP EPS of $2.21, beating forecasts of $1.79. The no-GAAP EPS increased 38.1% from the $1.60 reported in the same quarter last year.
Q4 non-GAAP operating margin grew to 38.4% compared to 32.2% in Q423, while the fourth quarter non-GAAP gross profit margin increased to 69.5% from 68.0% the previous year.
For the full year, revenue grew 17% to $ 8.35 billion, while the non-GAAP gross profit margin grew to 69.1% from the 68.1% reported in FY23. Meanwhile, the full year non-GAAP operating margin grew to 36.7% from 33.6% the previous year.
Revenue Driven By Growth In Surgical Robot Sales
Intuitive Surgical reported that global sales of da Vinci procedures increased 18% in the fourth quarter compared to Q423 and 17% for the full year. The company placed 493 da Vinci surgical systems in Q424, a significant increase from the 415 in Q423.
As of December 31, 2024, the company had 9,902 da Vinci surgical systems installed, a 15% increase compared to the 8,606 at the end of December 31, 2023.
Fiscal 2025 Outlook
For fiscal 2025, Intuitive Surgical expects the number of da Vinci procedures to grow 13% to 16% compared to fiscal 2024, below analysts’ forecasts of 17.1%. In 2024, the company achieved 17% growth compared to fiscal 2023.
It is expecting a non-GAAP gross profit margin of 67% to 68% compared to 69.1% in fiscal 2023. Intuitive Surgical non-GAAP operating expense growth to be in the range of 10% to 15% compared to 10% in fiscal 2024.
Highlights From The Earnings Calls
During the earnings call, CEO Gary S. Guthart stated that the company would focus on the full launch of da Vinci 5 in fiscal 2025. He added that they would pursue adoption of their focused procedures by country via training commercial activities, and market access efforts.
Intuitive Surgical (ISRG) Stock Performance
ISRG stock closed 0.29% lower on Thursday, January 23, 2025 at $ 608.66. That was after it hit an intraday high of $616 during the Thursday trading session. Following the Q4 earnings release after markets closed, the stock dipped 2.24% to 595.00 as of 7:08 AM EST after the full-year outlook came in below expectations.
The stock is trading above both its 50- and 200-day moving averages of $545.03, and $470.89, respectively. It has also outperformed the market, rising 61.96% in the past 52 weeks compared to the 26.15% gain of the S&P 500, and the 3.99% of the Healthcare sector in the same period.
Analysts are optimistic about the stock’s future, giving it a strong buy rating. They forecast an average price of $655, which is 7.61% based on Thursday’s closing price. On the high end of the forecast, they expect $711.0, while on the lower end, they forecast a price of $530 per share.
Should You Add Intuitive Surgical (ISRG) To Your Portfolio In 2025?
Following the guidance miss, ISRG stock took a dive during pre-market trading. However, it is worth noting that Intuitive Surgical is traditionally known to be conservative with its guidance. Additionally, the stock hit a new 52-week intraday high during the Thursday trading session, and some pullback was expected.
With a market cap of $216.79 billion, and a forward price to earnings ratio of 78.12, ISRG stock is undoubtedly expensive. However, it could potentially be a great long-term investment given the growing need for its robotic devices.
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